Microsoft Exec's Parting Shot: Remember Integrity

Departing Microsoft Server and Tools president Bob Muglia sent an email to his thousands of employees today, and it was quite a departure from the usual nostalgic success statements and predictions.

It was all about integrity.

He launched into the theme almost immediately, with statements like:

The foundation of who I am is based on living with integrity. Integrity requires principles, and my primary principle is to focus on doing the right thing, as best I can.

Other principles, or guideposts by which I live, are learning from and listening to others to make the best decision possible; not being afraid to admit a mistake and change a decision when it is wrong; being consistently honest, even when it hurts; treating our customers, partners, and people with the respect they deserve, with the expectation that each of my actions forms the basis of a lifetime relationship; and finally, being willing to admit and apologize when I have not lived up to these principles.

Leading starts by setting a strategy - not one that I’ve dreamed up myself but something that my team has worked together to create.

Choosing the right people for each role is critical, but insufficient. Even more important is empowering every person to be their best, to work with others, to be as creative as possible. It’s about providing each and every person with encouragement when they’ve done something amazing and constructive feedback when they are off track.

Only after he's gotten all this off his chest does he get around to celebrating the past (great financial results under his leadership) and getting excited about the future (cloud computing).

Call this speculation, but this email sure reads like an indictment of Microsoft's current corporate culture and leadership, including Steve Ballmer, who announced earlier today that he was looking to replace Muglia.

Or maybe he was feeling nostalgic and wanted to remind his employees to be good people.

But why would he expect otherwise?

Muglia is the fourth top-level Microsoft exec to announce his departure in the last nine months, joining former Xbox and mobile leader Robbie Bach, chief visionary Ray Ozzie (whose parting email criticized Microsoft for being too wedded to Windows), and Business (Office) leader Stephen Elop, who became CEO of Nokia.

These aren't obscure short-time VPs buried in some product group or sales office. They all report(ed) directly to Ballmer. Three of them controlled huge product groups with thousands of employees, and the fourth -- Ozzie -- was hand-picked by Bill Gates to succeed him. That doesn't look like strong leadership. It looks like mutiny.

Last week I celebrated 23 years working for Microsoft. During that time Microsoft has grown from a brilliant, yet awkward and aggressive adolescent riding a rocket ship into a mature industry leader. I’ve learned an amazing amount from the people with whom I’ve worked, from the customers I’ve served, and from the many partners who share this industry. I feel blessed to have had the privilege of working with so many great people. Later this year, I’m moving on to new opportunities outside of Microsoft, so I wanted to take a few minutes to share with you what’s important to me in life and leadership.

The foundation of who I am is based on living with integrity. Integrity requires principles, and my primary principle is to focus on doing the right thing, as best I can. The best thing, to the best of my ability, for our customers, our products, our shareholders, and of course, our people.

Other principles, or guideposts by which I live, are learning from and listening to others to make the best decision possible; not being afraid to admit a mistake and change a decision when it is wrong; being consistently honest, even when it hurts; treating our customers, partners, and people with the respect they deserve, with the expectation that each of my actions forms the basis of a lifetime relationship; and finally, being willing to admit and apologize when I have not lived up to these principles.

Integrity is my cornerstone for leading people. Leading starts by setting a strategy - not one that I’ve dreamed up myself but something that my team has worked together to create. The strategy provides the North Star for each person.

The second part of leading people is creating a structure that enables collaboration and provides clarity of roles and responsibilities. This is more than an organizational structure; it is creating a system so people can work together effectively and productively, in an environment that makes it possible for each person to give their best.

Leading is more than strategy and structure; it’s all about people. Choosing the right people for each role is critical, but insufficient. Even more important is empowering every person to be their best, to work with others, to be as creative as possible. It’s about providing each and every person with encouragement when they’ve done something amazing and constructive feedback when they are off track.

While each individual is important, success requires a team. The team is more important than the needs or capabilities of any individual. This is what makes a team much more than the sum of the parts, and a joy to be part of.

That brings me to delivering results. Results are built when people act with integrity and deliver their best. Results are all about the positive impact we have on the world – transforming personal lives and revolutionizing ways of doing business.

As a leader at Microsoft, I have a responsibility for delivering results to our shareholders. STB has performed well – with revenue growing from $9.7B in 2006 before I took over, to $14.9B reported last July, and operating income climbing from $3B to $5.5B over the same period. That’s over a 50% increase in revenue with a near doubling in income. That growth continued during the first quarter of our FY11. There are few organizations in the industry who have demonstrated the same results.

I am incredibly excited by the emergence of cloud computing, and the opportunity it represents to shape business and the way people live for years to come. I have deeply enjoyed my role in positioning Microsoft as a leader and innovator in cloud computing.

The coming months are a time of transition. During this time, I will be fully engaged in leading STB until new leadership is in place. After that, I will continue to do everything I can to help Microsoft, STB, and all of you.

I particularly want to recognize the outstanding work done by my current team in the Server and Tools Business over the past four years. We rapidly built a series of best-of-breed products that changed the way businesses run, while helping our customers and partners be successful. We’ve led the industry while facing tough competitors, most notably Linux, VMware, and Oracle. We succeeded by focusing on the simple idea that our customers make smart decisions, so we need to provide the best solution for everything our customers want to do with our products.

Microsoft is a blessing in my life and a blessing for my family. I love working with our customers and partners. Most of all, I treasure the wonderful and bright people with whom I’m privileged to work each day. I hope that in some way, large or small, I have helped each of you to lead your life with your own deep sense of integrity, that you help to bring out the best in other people, and deliver the results that matter most to you.